Administrators of Griffin Coal are investigating whether the coal miner was trading while insolvent and say that creditor claims so far total about $1 billion.
Griffin Coal was placed in administration on January 4 after missing deadlines for the payment of debt instalments and tax liabilities.
‘‘All claims are subject to investigation and adjudication,’’ KordaMentha administrator Brian McMaster told the company’s first creditors meeting in Perth today. ‘‘It is not a recognition that the claims are valid.’’
The possibility that the company could have been trading while insolvent was raised by a creditor during question time, who claimed Griffin Coal had not paid a November invoice but continued to rack up debts.
In response to the creditor’s question about insolvency, Mr McMaster told the meeting that determining the date of insolvency was a’’ very important’’ part of the administrators’ probe.
He also said the administrators would abandon their bid to secure a $4 million pre-payment for coal supply from electricity generator Verve Energy if settlement on terms could not be agreed upon in coming days.
‘‘We haven’t been able to settle on terms and conditions,’’ he said. ‘‘If we don’t do so in the next day or so, we’ll leave them where they are.’’
Verve has insisted the administrators provide proof that Griffin Coal has sufficient quantity and quality ore to deliver the $4 million worth of coal.
Mr McMaster said the payment was intended to be a working capital ‘‘buffer’’, ensuring Griffin Coal could continue producing coal.
However, it was ‘‘not essential’’.
‘‘It was something that we thought made sense but without it, we can continue to operate.
‘‘We’re cashflow positive and obviously we have quality customers who need the coal, and we’re continuing to service them.’’
He said Griffin Coal’s operations at Collie in WA’s south cost about $500,000 a day to operate.
AAP
